Federal grant going to improvements, not affordable housing

High-income Newport Beach finds other uses for its funds, including decorative sidewalks, landscaping.

April 28, 2011|By Mike Reicher, mike.reicher@latimes.com

NEWPORT BEACH — When the federal government doles out grants to help low- and moderate-income individuals, it has to make an exception for a city like Newport Beach.

The majority of households here earn more than $80,000, and there are few pockets with people of even average means.

So when the City Council approved its annual Community Development Block Grant funding this week, more than half the funds were able to pay for decorative sidewalks, street furniture, landscaping and other street improvements.

CDBG funds are normally used to "ensure decent affordable housing, to provide services to the most vulnerable in our communities," according to the U.S. Department of Housing and Urban Development website. Also, the program is meant to "create jobs through the expansion and retention of businesses."

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City leaders often complain that Balboa Village, the area near the Fun Zone and the Balboa Pier, is economically depressed — especially during the winter months. About 10 years ago they borrowed $2.4 million from HUD to spruce up the area. The city is still paying off the loan, to the tune of about $200,000 per year.

Officials were able to qualify Balboa Village, according to the city's CDBG consultant Clint Whited, because at least 31% of the residents in the neighborhood earned either low or moderate incomes compared with the rest of Orange County, according to the 2000 U.S. Census.

The streetscape investments were meant to "stimulate future economic investment and provide a more suitable living environment," according to a CDBG application. They were part of a larger $8-million improvement to the area that also re-vamped the pier parking lot and public plaza.

Today, purple undulating waves span the pavement near the pier.

Neighboring Irvine, on the other hand, spends much of its CDBG funds to spur affordable housing development. This week, its council allocated most of the $1.3 million in grants it receives to public-private partnerships with developers such as Jamboree Housing.

Newport has no strategy to build more affordable housing, said Cesar Covarrubias, executive director of the Kennedy Commission, an Orange County affordable housing advocacy group.

"The city has been challenged with identifying affordable housing sites," he said.

That might change when developers begin planning condominiums in the area to the southeast of John Wayne Airport. City zoning law says they have to dedicate a portion of each development to low- and moderate-income housing.

Covarrubias said that could be a good time for the city to provide grants and incentives to developers — above and beyond its current "inclusionary zoning" requirements.

Mayor Mike Henn thinks what the city does today is enough.

"For me, it's a good and viable tool to improve the base of affordable housing in the community," he said.